The two firms signed the PPA in Hanoi on Friday.
PV Power said this contract is an important step for launching commercial operations at the two LNG power plants.
Vietnam’s first LNG power plants will have a total capacity of 1.5 GW.
Negotiations on the PPA began in 2019.
PV Power said that the talks were “challenging” and took a long time as this is the first PPA for LNG power plants in Vietnam.
The signing of the PPA will help PV Power to sign a gas purchase agreement (GSA) with PetroVietnam Gas soon.
In addition, the signing of the PPA will also help PV Power to seek loans from international institutions.
Commissioning to start
In November 2021, PV Power broke ground on the Nhon Trach 3 and 4 plants in the southern province of Dong Nai, which are worth about $1.4 billion.
South Korea’s Samsung C&T secured a contract from PV Power to build the plants in a consortium with Vietnamese contractor Lilama.
US-based GE provided the gas turbines.
Earlier this year, PV Power signed a deal with Citibank and ING for a $300 million short-term loan to fund the construction of the LNG plants.
The launch of these LNG plants had been delayed due to several issues, including those related to the project’s land lease and the power purchase agreement with EVN.
PV Power recently said it plans to start commissioning its Nhon Trach 3 LNG power plant in October.
The power firm expects the Nhon Trach 3 power plant to reach the “first ignition milestone” on October 15, 2024.
Following the completion of the commissioning phase, the plant is expected to start commercial operations in April 2025.
In addition, the Nhon Trach 4 power plant is expected to start its commissioning phase on December 22, 2024, and launch commercial operations in July 2025, according to PV Power.
Thi Vai LNG terminal
PV Gas launched its Thi Vai LNG terminal on October 29, 2023, after nearly 4 years of construction and commissioning.
This is Vietnam’s first LNG import terminal.
In July 2023, LNG giant Shell delivered the commissioning LNG cargo to the terminal from Indonesia’s Bontang LNG plant.
PV Gas has received five LNG cargoes at the facility so far and just recently issued a new spot LNG cargo tender for delivery in October.
Besides Shell, PetroVietnam Gas received cargoes from a unit of France’s TotalEnergies, QatarEnergy LNG, previously known as Qatargas, and PetroChina.
The Thi Vai LNG import facility consists of one 180,000-cbm LNG tank, a jetty, and regas area.
The terminal has a capacity of 1 mtpa in its first phase, but PV Gas plans to boost the capacity to 3 mtpa in the next stage.
In addition to this facility, the Cai Mep LNG terminal, located in Vung Tau district in South Vietnam, is expected to be launched later this year.
